Nevada wants out of federal health exchange

Nevada's Silver State Health Insurance Exchange took the first step on Thursday to getting out of the federal healthcare.gov system and build its own exchange.

The Legislative Interim Finance Committee granted SSHIX $1 million from its own reserves to put together an RFP and find a private provider.

Heather Korbulic, executive director of the Nevada exchange, said they have to make a change because the federal exchange is raising its premium rates dramatically.

Until 2017, healthcare.gov didn't charge states that linked their own front-end system to the federal exchange. That year, she said, the feds levied a 1.5 percent premium on them. It went to 2 percent for 2018, eating up most of the 3.15 percent total premium Silver State currently charges.

She said when the federal charge rises to 3 percent in 2019, it will consume all but a tiny fraction of the 3.15 percent premium leaving the state almost nothing to run the front-end operation.

She said the state would have to either abandon a state exchange altogether or raise the premiums they charge the more than 90,000 Nevadans who get coverage through the exchange. And she said there's no guarantee the feds won't further increase what they charge.

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She said another major benefit of operating Nevada's own exchange is the state would get the ability to do a lot more for its consumers. Right now, she said they don't have back-door access to healthcare.gov so they have "no insight into our consumers, who we are enrolling and where."

She said a state operated exchange would give Silver State access to a wealth of data about its customers to better serve their needs and better focus outreach and education efforts.

Korbulic said after extensive talks with vendors, she's confident the state can provide a state exchange for as little as a 1.5 percent premium.

The difference, in dollars, is significant. She said staying with the federal exchange would cost Nevada's program about $12 million next year.

"If we go with a private, proven vendor who has much more agile and modern technology, we could get it for less than $6 million," she said.

Korbulic pointed to Idaho as an example. That state runs its own exchange for a premium charge of just 2.2 percent.

All the potential savings would go to the consumers buying health plans.

Nevada tied its state exchange to the federal healthcare.gov site after an ambitious attempt to build a state site using Xerox as a contractor failed. But Korbulic said things have changed dramatically since then and there are several vendors out their with proven systems. She said the RFP will focus on vendors who have exchange systems that have been running successfully for a year or more.

"There's nothing special that needs to be built for the Nevada exchange," she said adding the private vendor would pretty much provide an "off the shelf" system to Nevada.

She said they'll use the $1 million to contract with a vendor as early as July or August and have the system up and running in time for open enrollment in the fall of 2019.